Big Bank Tax Would Pinch Homebuyers

SMITH BRAIN TRUST -- President Obama’s proposed fee on big banks would hurt homebuyers and fail to control risk-taking by those firms with more than $50 billion in assets, says Clifford Rossi, professor of the practice at the University of Maryland’s Robert H. Smith School of Business. The proposal, slated for inclusion in tonight’s State of the Union address, would affect about 100 financial institutions. Rossi, a former senior executive at several large financial services companies, is available for media interviews to expand on these comments:

“The Administration's proposed ‘tax’ on the largest banking institutions is an ineffective way of controlling risk-taking in the banking sector. Focusing on what drives risk-taking in the first place, rather than the symptom, would have greater effect on managing the potential for systemic risk events. The tax also would likely raise borrowing costs and/or restrict credit availability on borrowers.”

Before coming to the Smith School, Rossi spent nearly 25 years in banking and government, holding senior executive roles in risk management at several of the largest financial services companies. His most recent position was Managing Director and Chief Risk Officer for Citigroup’s Consumer Lending Group. Earlier in his career, Rossi held senior risk management positions at Freddie Mac and Fannie Mae.

Members of the media may contact him at 301-908-2536 or crossi@rhsmith.umd.edu.